Nasdaq OMX Group's 2Q profit falls 31%

Nasdaq OMX Group Inc. said today its second-quarter profit fell 31 percent amid losses tied to foreign currency translation and a charge from selling its stake in Orc Software. Competition also continued to take a toll on average trading fees and market share in some of Nasdaq OMX's markets. The exchange operator earned $69 million, or 33 cents per share, during the quarter ended June 30. For the year-earlier period, it had net income of $100 million, or 47 cents per share. Nasdaq OMX recorded a $19 million loss related to the sale of its ownership stake in Orc Software AB. The company also took charges tied to severance, merger expenses, early repayment of debt and the declining value of its investment in the Oslo Bors exchange. Excluding those charges, Nasdaq OMX's adjusted earnings were $99 million, or 47 cents per share. Analysts polled by Thomson Reuters, on average, forecast earnings of 47 cents per share on revenue of $368.5 million. Analysts typically do not include special charges in their estimates. Nasdaq OMX's revenue declined 3 percent to $367 million. Revenue would have fallen 13 percent if results from the Philadelphia Stock Exchange were included in the year-ago results. Nasdaq OMX completed its acquisition of the Philadelphia Stock Exchange in July 2008. The decline in revenue in the latest quarter was primarily the result of foreign currency translation. While currency translation accounted for the bulk of revenue declines, Nasdaq OMX also saw a decline in U.S. cash equity trading volume and the value of trading in European cash markets. U.S. cash equity volume fell as Nasdaq OMX's market share slipped. Revenue also declined in that segment because the average fee per trade. Competition between exchange operators for trading volume has increased in recent years, which has driven companies like Nasdaq OMX to cut trading fees to try and maintain or improve market share. European cash equity trading revenue fell during the quarter as the value of trading in European markets fell from the year-ago period. Nasdaq OMX did, however, see improved trading volume in its U.S. derivative trading markets. European derivatives trading volume declined during the quarter.